Business XL magazine’s annual Rising Stars research identifies the top 50 fast-growing UK companies in 2009. It is the only such ranking to take into account both profit and turnover growth, as well as assessing future prospects through interviews with the featured companies. This year the Rising Stars have combined sales of £1.3 billion and profits of £147 million.
1. Ascribe
Turnover: *£23.1m (+15%)
Pre-tax profits: *£4.2m (+24%) *pro forma for year-end 2009
Sector: IT Based: Lancashire
‘If you’re admitted into a hospital, you have a one in eight chance of suffering an adverse event that is related to your treatment,’ says Stephen Critchlow, the urbane CEO of Ascribe. It’s a sobering thought, but it’s a problem that Ascribe is addressing through the software it supplies to primary and secondary healthcare providers in the UK and overseas.
‘The biggest, most compelling reason to use Ascribe’s solutions is the safety aspect – we reduce errors,’ states Critchlow. With clients in Ireland, Malaysia, Hong Kong, Australia and New Zealand, and the NHS seeking to overhaul its IT systems, this Bolton-based business has grown its revenues by just under 50 per cent for three consecutive years. Critchlow says Ascribe could ‘double its profits overnight’ but the strategy has been to invest heavily in infrastructure to develop the business instead.
Critchlow decided to delist the company from AIM last year after he became frustrated by its low market cap, although he is full of praise for the junior exchange. ‘It served a purpose. We used paper to acquire companies and we had three years where it was absolutely right for the business. But there was this silly thing that once we got below a market cap of £50 million, people just seemed to pull their money out for no reason.’
Since delisting, Ascribe has made two acquisitions, which brings the total number to ten since 2004. Critchlow is on the lookout for more and has ambitions to take the company onto the Main List. ‘We’d need a market cap north of £200 million,’ he says.
2. Miniclip
Turnover: £19.2m (+54%)
Pre-tax profits: £5.8m (+98%)
Sector: IT Based: London
Type “free games” into Google and Miniclip comes up top. The company, which offers free-to-play games to its community of 50 million users, has grown organically over the past nine years without ever spending any money on acquiring user data or advertising, according to CEO Robert Small. ‘We believe that investing in our games is the best way of growing our user base and that the returns we get from this will outweigh any money we could potentially spend on advertising,’ says the Ernst & Young Entrepreneur of the Year for 2008. The company makes money from advertising deals with companies such as Kellogg’s, Warner Brothers and Lego, and is expanding aggressively. ‘It’s a great time to be hiring with the talent pool being pretty deep at the moment,’ adds Small.
3. Ecotricity
Turnover: £28.0m (+47%)
Pre-tax profits: £2.0m (+46%)
Sector: Cleantech Based: Gloucestershire
‘More customers and more windmills,’ is the reason new-age traveller turned entrepreneur Dale Vince (right) gives for his company’s fast growth. Launched in 1995 as the Renewable Energy Company and later rebranded as Ecotricity, the business started with £1,000 of Vince’s own savings. After building his own wind-monitoring tower, he shot to success when Scottish Power asked him to build a ‘shed load’ of the same product. No fan of VCs, because they are just ‘in for the short term’, Vince has plans to expand the company by adding gas systems as another energy source in six months’ time. ‘In ten years’ time we are looking to be the seventh biggest energy company in the UK,’ he says.
4. Alan Cristea Gallery
Turnover: £7.4m (+36%)
Pre-tax profits: £1.3m (+26%)
Sector: Media Based: London
Alan Cristea started planning for the recession 18 months ago. This is his fourth. ‘You have to learn to behave differently,’ he says. ‘Obviously there is a negative side: you do have meetings going through your costs item by item, but the important thing is to follow that up with a meeting where you are having creative ideas.’ The big mistake is to concentrate solely on cost cutting. ‘I’ve known quite a few people in the art trade who hold out in the recession by depleting their staff and their stocks; then when the upturn comes the camel’s back finally breaks.’ Cristea’s approach is paying off. While all the senior staff ‘instantly’ agreed to take pay cuts, the gallery achieved record sales in June, with 80 to 90 per cent of turnover coming from new works by living artists. Cristea, who headed a management buy-out of the business 15 years ago, has never borrowed money and this cautious approach to growth promises to pay off as the company weathers the recession.
5. Intelliflo
Turnover: £5.2m (+58%)
Pre-tax profits: £1.6m (+65%)
Sector: IT Based: Surrey
A developer of web-based software for financial advisers and banks, Intelliflo has grown from seven employees when it started five years ago to 55 today. CEO Nick Eatock reveals that the company is owned ‘almost entirely’ by its founders and staff. It was also one of the first players in its market to capitalise on the growth potential of software-as-a-service. Eatock is sanguine about Intelliflo’s prospects. ‘With the FSA’s ideas [for financial services regulation], the one thing for certain is that there’ll be lots of change. For any technology company, especially a web-based one, that’s a good thing,’ he says, adding that 1,000 refinements are made to Intelliflo’s software every year. A deal with financial adviser network SimplyBiz (a former Business XL Rising Star) promises further growth, with members of the organisation receiving Intelliflo’s software at a subsidised price.
6. Abcam
Turnover: £36.7m (+50%)
Pre-tax profits: £8.0m (+44%)
Sector: Health Based: Cambridgeshire
Dubbed the “Amazon.com of antibodies”, manufacturer and online retailer Abcam does not quite enjoy the household-name fame of its book- and DVD-selling peer, but its growth in the past few years is phenomenal – £17.1 million profits are expected for the year to June, up from less than £5 million in three years. The Cambridge-based company’s shares have continued to soar over the past two years, putting it in a tiny minority among its AIM-listed peers. Prospects appear bright, with a new processing facility helping to deliver the improved profit margins management had expected.
7. Woodford Holdings (Volac)
Turnover: £60.3m (+26%)
Pre-tax profits: £5.6m (+113%)
Sector: Food Based: Hertfordshire
Volac (wholly owned by Woodford Holdings) established a reputation for producing milk powders for calves and lambs in the 1980s. The raw material is liquid whey, a by-product of cheese making. More recently, Volac has moved into the higher-margin business of separating the protein from the lactose (sugar) in the liquid whey, which has allowed it to enter the human food market while continuing to sell an element of its products as animal feed. According to communications manager Andy Richardson, ‘It’s a unique business model that effectively uses all the components of the liquid whey.’ Run by MD James Neville, the grandson of the company’s founder, Volac has joint ventures in the Netherlands and Malaysia.
8. Daisy
Turnover: £53.5m (+62 %)
Pre-tax profits: £5.0m (+156%)
Sector: Telecoms Based: Lancashire
The UK’s most acquisitive company has been at it again in the past couple of months, snapping up the telecoms arm of bombed-out IT equipment provider Redstone for £17 million, and rivals AT Communications Group (ATC) and Eurotel for £20.5 million. Prior to joining AIM this July via an £81 million reverse takeover of telecoms company Freedom4 Group, Daisy had made 24 acquisitions (it ranked six in last year’s Rising Stars). Matthew Riley, founder and chief executive of Daisy, who made his fortune through the Freedom4 deal, shows no sign of slowing down, declaring, ‘We plan to be the UK’s leading telecoms service provider.’
9. Advanced Medical Solutions
Turnover: £20.3m (+21%)
Pre-tax profits: £2.9m (+54%)
Sector: Health Based: Cheshire
Wound treatments specialist AMS, having broken even four years ago and almost tripled earnings in the following two years before a mere 50 per cent gain last year, still has fantastic potential for further gains. Boss Don Evans, who left huge rival Johnson & Johnson to join the company over a decade ago, says the launch of its Liquiband “skin superglue” product into a $170 million US market next year is a ‘step change on the horizon’. The company has also recently gained US regulatory approval for a new silver polyurethane wound dressing. Growth has so far come from white-labelling its range of chronic wounds treatments for larger partners and selling its cut-price range to cash-conscious providers like the NHS, where usage of AMS’s range has risen from under 100 to half the 800 hospital trusts in the UK.
10. Digital Marketing Group
Turnover: £56.7m (+11%)
Pre-tax profits: £3.1m (+45%)
Sector: Media Based: London
The brainchild of chief executive Ben Langdon, a visionary in this particular sector, AIM-listed DMG has swiftly established a track record of meeting its numbers, even amid the most arduous advertising industry conditions in living memory, and with many smaller company peers issuing profits alerts.
11. DSE
Turnover: £16.2m (+25%)
Pre-tax profits: £5.0m (+82%)
Sector: Electronics Based: North Yorkshire
Established as a maker of communications devices for divers (hence the name, Deep Sea Electronics), DSE’s focus soon changed to the manufacture of electronic control devices for diesel generators. ‘We have 90 to 95 per cent of the UK market, but that is a limited size. The real growth area for us is in the 60 to 70 countries where our products are distributed,’ says marketing manager James Maynard.
12. Hydrock
Turnover: £27.1m (+27%)
Pre-tax profits: £1.9m (+95%)
Sector: Engineering Based: South Yorkshire
Brian McConnell founded engineering company Hydrock in 1996. It now has more than 400 staff. While admitting that the recession has affected orders, McConnell says his decision not to make redundancies has paid off. ‘Now we are well placed to take advantage of the upturn because, unlike our competitors, we didn’t carve chunks out of our staffing costs and still have all the right people on board,’ he says, adding that Hydrock is currently in talks with eight companies about potential acquisitions.
13. Redhall Group
Turnover: £86.7m (+52%)
Pre-tax profits: £4.4m (+102%)
Sector: Support services Based: West Yorkshire
Strong organic growth and selective takeovers are the hallmarks of engineering support services star Redhall. With proven entrepreneur David Jackson at the tiller, the AIM darling (number 11 in last year’s Rising Stars) is building its brand and swelling its order book through ever-strengthening ties with a loyal client base including Sellafield, the MoD and the Atomic Weapons Establishment.
14. Balhousie Care
Turnover: £15.0m (+74%)
Pre-tax profits: £1.5m (+15%)
Sector: Health Based: Scotland
‘We’re one of the fastest-growing companies in Scotland,’ says Tony Banks, chairman of Balhousie Care Group. The Forfar-based care homes manager has used the recession to its advantage, acquiring distressed businesses to complement its organic growth. ‘Falling property values don’t affect us too much because we’re not planning on selling and it means everything is cheaper for us,’ adds Banks.
15. Simcyp
Turnover: £3.1m (+56%)
Pre-tax profits: £1.0m (+82%)
Sector: Health Based: South Yorkshire
The words profit and spin-out rarely go together but that’s what Simcyp has achieved for its most recent year-end. Formed in 2001 as a spin-out from Sheffield University, this drug testing technology company assesses the reactions of virtual people administered with virtual drugs. However, the company’s growth is also down to its consultation work. ‘In the past 12 months we’ve had lots of orders on that basis,’ says MD John Evans, who adds that he sees ‘nothing in our foreseeable future that will require support from VCs’.
16. Thunderhead
Turnover: £15.9m (+28%)
Pre-tax profits: £2.9m (+47%)
Sector: IT Based: Hertfordshire
Software provider Thunderhead helps companies to add branding to their correspondence and marketing literature through automated processes. Having secured contracts with the likes of Direct Line, Barclays and, recently, the Bank of America, the company’s customer base is going from strength to strength as it expands into new sectors and countries. Thunderhead draws additional strength from being self-funded with no debt.
17. European Electronique
Turnover: £30.7m (+19%)
Pre-tax profits: £1.3m (+99%)
Sector: IT Based: Oxfordshire
‘Even though we’re in a recession, there isn’t a slowdown in government,’ says Mark Holton, general sales manager at European Electronique. The ICT provider has been helped through the downturn by lucrative contracts in the public sector, where it does ‘85 to 95 per cent’ of its business, according to Holton.
18. Brainjuicer
Turnover: £9.3m (+42%)
Pre-tax profits: £1.4m (+54%)
Sector: Media Based: London
Brainjuicer founder John Kearon isn’t letting the recession curb his enthusiasm: ‘We want to compete with WPP, not be bought by them.’ Bold words indeed, but it’s certainly full steam ahead as plans for next year include opening the company’s eighth and ninth global offices in Brazil and China. It’s optimistic stuff from the market research group but we definitely like their style (Brainjuicer came in at 32 in 2008).
19. Caretech Holdings
Turnover: £67.7m (+27%)
Pre-tax profits: £7.7m (+34%)
Sector: Health Based: Hertfordshire
Founded by brothers Farouq and Haroon Sheikh (executive chairman and chief executive respectively), Caretech provides social care, supported living and other services for people with learning difficulties who are unable to live alone. The group’s latest financials, for the half-year to March, were nothing short of excellent, showing turnover nurtured 30 per cent higher to £39.5 million – significantly, the rate of organic growth was very healthy at eight per cent – and a 47 per cent pre-tax profits surge to £5.7 million (Caretech was 40th in last year’s Rising Stars).
20. M&M Direct
Turnover: £74.1m (+18%)
Pre-tax profits: £5.6m (+32%)
Sector: Consumer Based: Herefordshire
Described by CEO Steve Robinson as ‘an internet version of TK Maxx, but with the look of a proper full-price retailer’, M&M Direct sells excess stock from famous brands at competitive prices and has grown its business through the downturn largely through word-of-mouth. ‘Because we don’t want to destabilise any existing market, we don’t shout about what we do,’ says Robinson, adding that a recent customer survey revealed more than 99 per cent of the company’s customers would recommend it to friends and family. M&M has recently launched a euro-denominated version of its website.
21. The Foundry
Turnover: £4.6m (+88%)
Pre-tax profits: £1.2m (+1,726%)
Sector: Media Based: London
Established in 1996, The Foundry’s software is behind special effects sequences in the Harry Potter films, Speed Racer, Australia, Iron Man, and BAFTA award-winning The Curious Case of Benjamin Button. The company announced a management buy-out in June led by CEO Bill Collis and the original founders and backed by Advent Venture Partners, and expects to report sales of £7.1 million and EBITDA of £1.7 million this year. Headquartered in London with offices in Los Angeles, The Foundry has ‘invested aggressively’ in its development since it acquired LA-developed compositing system Nuke in 2007.
22. Immunodiagnostic Systems
Turnover: £24.9m (+51%)
Pre-tax profits: £4.8m (+27%)
Sector: Health Based: Tyne & Wear
Ensconced in an obscure niche of the medical diagnostics sector – it provides a range of laboratory tests for vitamin D as well as other compounds – it seems that IDS is poised for big things. It recently launched a new automated testing product, iSYS, which is set to be rolled out over the coming months in the US, where the company enjoyed 80 per cent growth with its older product last year.
23. Cybit
Turnover: £25.5m (+30%)
Pre-tax profits: £2.1m (+27%)
Sector: Support services Based: Cambridgeshire
Fish lovers still enjoying Cornish cod in 20 years’ time should have telematics expert Cybit to thank, as its technology helps government environment agency Defra to stop sneaky Spanish trawlers from pinching stocks from UK waters. The company’s bread and butter, however, is in tracking trucks, vans, boats and staff – “mobile assets” as it calls them – in order to deliver tasty efficiencies for its clients.
24. Health Management
Turnover: £12.2m (+61%)
Pre-tax profits: £1.8m (+75%)
Sector: Health Based: East Sussex
Providing medical advice to large employers as well as government departments, the police force, NHS trusts and councils, Health Management shows no sign of slowing down. ‘It’s much cheaper than running medical centres and we are counter cyclical, as we allow employers to manage their employee base more actively,’ says MD Andrew Noble.
25. Lydonford
Turnover: £16.2m (+34%)
Pre-tax profits: £1.4m (+131%)
Sector: Consumer Based: West Midlands
Cutting a lonely figure among retailers in this year’s Rising Stars, sportswear wholesaler Lydonford appears to have hit a winning formula. It is specialising in value-for-money merchandise and going against received wisdom by concentrating on supplying a handful of clients. So maybe it is better to put all your eggs in one basket after all.
26. Mainstay
Turnover: £7.7m (+32%)
Pre-tax profits: £1.3m (+56%)
Sector: Support services Based: Worcestershire
‘We spend an awful lot of time doing strategic thinking,’ says Mainstay’s MD, David Clark. That meant reducing the property manager’s portfolio of urban rental clients and taking on more staff to focus on its key areas, such as the student accommodation market. ‘Our biggest concern is not having a future pipeline, so we’ve really invested to protect it,’ says Clark.
27. Bordeaux Index
Turnover: £47.4m (+94%)
Pre-tax profits: £3.0m (+118%)
Sector: Consumer Based: London
Despite alcohol sales sinking, fine wine trader Bordeaux Index has reason to raise a glass over the past year. ‘The key to our strength has been the Asian market. Although revenue has tailed off [in the UK], in China it has consistently increased,’ says FD Geraint Carter.
28. Cohort
Turnover: £78.6m (+38%)
Pre-tax profits: £6.5m (+16%)
Sector: Support services Based: Oxfordshire
Independent technology specialist Cohort, whose impressive client roster includes the Ministry of Defence, is an acquisitive business driving healthy levels of organic growth. It is uniquely placed, according to MoD man and chief executive Andy Thomis, to profitably consolidate its chosen (and robust) defence, government and security markets.
29. Parcel2GO
Turnover: £8.5m (+42%)
Pre-tax profits: £340,000 (+28%)
Sector: Support services Based: Lancashire
The turning point for this online parcel delivery site came during the national postal strike in 2007. ‘The business doubled in a week to a run rate of £500,000 and we kept the customers too,’ says business development director Richard Adams-Mercer. With Royal Mail in disarray, it seems the only way is up for this family business.
30. BTC Activewear
Turnover: £25.1m (+15%)
Pre-tax profits: £501,000 (+86%)
Sector: Consumer Based: West Midlands
This clothing distributor, which operates in the UK and Ireland, has decided to go on the offensive by ordering more stock for its new 106,000 sq ft warehouse (up from 40,000). ‘In our business, stock is king,’ says joint MD Glenn Hyams. Retail distribution is undoubtedly a punishing sector to be operating in and that won’t be helped by competitors promising the world to win contracts. Hyams is undeterred: ‘There are companies that do succeed in a recession: not everyone suffers,’ he says.
31. Pimlico Plumbers
Turnover: £14.7m (+10%)
Pre-tax profits: £750,000 (+81%)
Sector: Support services Based: London
Steered by Charlie Mullins, this family business keeps on growing. ‘The jobs are smaller at the moment,’ he says. ‘Rather than buy a new boiler, customers will have it repaired four times.’ Mullins says that he ‘doesn’t like banks’ and this antipathy appears to be working in his favour: ‘One of the things to get through a recession is to not owe anyone anything. We don’t even have an overdraft. I’ve never seen my bank manager and I never will.’
32. The Rare Art Group
Turnover: £18m (+35%)
Pre-tax profits: £1.3m (+103%)
Sector: Media Based: London
‘Nothing is recession-proof, but when you’ve got something of a limited supply and high quality, there’s always going to be a demand,’ says Lewis Smith of antique dealer The Rare Art Group. Smith says antiques appeal to buyers in all economic conditions as they represent assets ‘not in the banker’s control’. The company has remained debt-free, he adds.
33. Quadrille Publishing
Turnover: £11.5m (+42%)
Pre-tax profits: £1.0m (+63%)
Sector: Media Based: London
Alison Cathie, managing director, says the company’s performance is down to its vibrant portfolio of work, which has proved popular both the UK and US markets. ‘In order to weather the recession, we have been even more rigorous in the selection of the publishing projects we have taken on, while still taking some calculated risks,’ adds Cathie.
34. Blackout
Turnover: £4.1m (+17%)
Pre-tax profits: £675,000 (+67%)
Sector: Media Based: London
Starting from scratch from his kitchen table in 1990, Steve Tuck has built a business that now handles events such as the G20 summit and the Film4 screenings at Somerset House in London. It’s all about drapes – ‘our job is to get anything to hang in the air’, says Tuck – and though growth has slowed, the company is ‘cutting its cloth to fit’ in the recession.
35. Liberty Wines
Turnover: £22.3m (+24%)
Pre-tax profits: £1.1m (+35%)
Sector: Consumer Based: London
Wholesaler Liberty Wines supplies independent shops and restaurants and its wines rarely retail for less than £6 a bottle. Chief operating officer Gary Wyatt says the company does no above-the-line marketing but is adept at winning industry awards as well as coverage in the trade press.
36. Zytronic
Turnover: £14.7m (+30%)
Pre-tax profits: £1.7m (+155%)
Sector: Electronics Based: Tyne & Wear
The global demand for Zytronic’s durable touch sensors and optical filters, used everywhere from jukeboxes to shop windows, shows no sign of letting up.
37. Driver
Turnover: £18.2m (+44%)
Pre-tax profits: £2.0m (+90%)
Sector: Support Services Based: Lancashire
CEO Steve Driver flags up healthy growth in the UK, where London and the South led growth for this dispute resolution specialist, as well as in the Middle East.
38. Media Initiatives Group
Turnover: £22.9m (+21%)
Pre-tax profits: £2.1m (+23%)
Sector: Media Based: London
Video is a major source of growth for advertising agency Media Initiatives Group, according to CEO Alan Greaney, who says convergence is becoming a business reality.
39. Benoy
Turnover: £35.9m (+25%)
Pre-tax profits: £4.4m (+538%)
Sector: Support services Based: London
Designer of the Bullring development in Birmingham (left) and London’s Westfield
centre, Benoy has completed projects in the Middle East and China.
40. IS Pharma
Turnover: £12.2m (+73%)
Pre-tax profits: £2.0m (+70%)
Sector: Health Based: Cheshire
Nurtured by informed CEO Tim Wright, IS Pharma acquires and commercialises late-stage drugs and devices focused on critical care, oncology and neurology.
41. ACM Shipping – International tanker broker that has delivered profits every year since its launch in 1982
42. Outsourcery – This acquisitive unified comms and hosted IT services concern plans to be the biggest independent player in its designated business-to-business space
43. Melorio – Even though the Labour government’s flagship Learning & Skills Council has been disbanded, huge support and, in turn, funding remains for the provision of vocational work-based training and education
44. Allocate Software – The HR software specialist now has 81 NHS trust customers, swelling revenue 36 per cent to £15.8 million by its most recent year-end
45. David Chipperfield Architects – Recently won a contract to design an extension to London’s Geffrye Museum, and with an office in Shanghai is well-positioned for Far Eastern growth
46. Heritage Automotive – Audi, Volkswagon and Peugeot dealer that has seen strong growth recently, albeit on a slim margin
47. Eco Sustainable Solutions – Recycling organic waste into compost, mulch and coloured chippings has proved profitable for MD Trelawney Dampney, who recently announced the opening of a £350,000 plant in Weymouth
48. George Pragnell – Family-run business based in Stratford-upon-Avon selling new and antique jewellery
49. Education Development International – With good levels of organic growth and the successful integration of acquisitions, this Coventry-based accredited qualifications business is set to keep teaching rivals a lesson or two in 2010
50. LK Bennett – Designer and retailer of women’s shoes whose financial performance still shines with celebrity shoppers including Penelope Cruz, Kate Moss and Nigella Lawson
Methodology
The Business XL Top 50 Rising Stars is an annual ranking of UK-based fast-growing companies reporting turnover of between £2.5 million and £100 million and profits of at least £300,000. Nominated companies must have reported growth in sales and pre-tax profits in each of the two previous years, with good prospects for a continuation of that growth. Sectors not eligible for the Enterprise Investment Scheme, such as property investment and financial services, are excluded, with the exception of nursing homes. All financials used are from the most recent year-end unless otherwise stated, though efforts have been made to assess the strength of the company’s performance following its latest annual report. The Top 50 Rising Stars is an independent ranking and no company has paid to be included.
Data has been drawn from Companies House and the following sources:
FAME, a Bureau van Dijk product
FAME contains detailed information on companies in the UK and Ireland, with software for searching and analysis
The AIM Guide
A comprehensive publication with details of all public companies listed on AIM*
Growth Company Investor
An online investor resource for news and tips on small-cap public companies*
Contributors: Marc Barber, Nick Britton, James Crux, Oliver Haill, Kathleen Hall, James Harris
